References to the "Company," "Periphas Capital Partnering Corporation," "our,"
"us" or "we" refer to Periphas Capital Partnering Corporation. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this report. Certain information contained
in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated on September 11, 2020 as a Delaware
corporation and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar
partnering transaction with one or more businesses, which we refer to as a
"Partnering Transaction." We are an emerging growth company and, as such, we are
subject to all of the risks associated with emerging growth companies.
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Our sponsor is PCPC Holdings, LLC, a Delaware limited liability company (the
"Sponsor"). The registration statement for our Initial Public Offering was
declared effective on December 9, 2020. On December 14, 2020, we consummated the
Initial Public Offering of 14,400,000 CAPS™ (the "CAPS™"), at an offering price
of $25.00 per CAPS™, generating gross proceeds of $360.0 million, and incurring
offering costs of approximately $4.0 million (net of reimbursement of offering
costs of approximately $350,000 from the underwriters. The underwriters
exercised the over-allotment option in full and on December 16, 2020 purchased
an additional 2,160,000 additional CAPS™ at the public offering price (the
"Over-Allotment CAPS™"), generating gross proceeds of approximately
$54.0 million, and we incurred additional offering costs of approximately
$540,000 in underwriting fees (the "Over-Allotment").
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement of 224,000 private placement CAPS™ (the "Private Placement
CAPS™") at a price of $25.00 per CAPS™ to the Sponsor, generating proceeds of
$5.6 million and simultaneously with the closing of the Over-Allotment on
December 16, 2020, the Company consummated the second closing of the Private
Placement, resulting in the purchase of an aggregate of an additional 21,600
Private Placement CAPS™ at a price of $25.00 per CAPS™ by the Sponsor,
generating gross proceeds to the Company of $540,000 (the "Private Placements").
Upon the closing of the Initial Public Offering, the Private Placements, and the
Over-Allotment, $414.0 million ($25.00 per CAPS™) of the net proceeds of the
Initial Public Offering and certain of the proceeds of the Private Placement
was placed in a trust account ("Trust Account") with Continental Stock
Transfer & Trust Company acting as trustee and invested in United States
"government securities," within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 185 days or less or in money market
funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act which invest only in direct U.S. government treasury
obligations, as determined by the Company, until the earlier of: (i) the
completion of a Partnering Transaction and (ii) the distribution of the Trust
Account as described below.
If we are unable to complete a Partnering Transaction within 24 months or
December 14, 2022, (or 27 months, or March 14, 2023, if we execute a letter of
intent, agreement in principle or definitive agreement for the Partnering
Transaction within 24 months) from the closing of the Initial Public Offering to
complete our initial Partnering Transaction (the "Partnering Period"), we will
(i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, of $25.00, and
(iii) as promptly as reasonably possible following such redemption, subject to
the approval of the remaining stockholders and the board of directors, liquidate
and dissolve, subject in the case of clauses (ii) and (iii), to the Company's
obligations under Delaware law to provide for claims of creditors and in all
cases subject to the other requirements of applicable law.
Results of Operations
Our entire activity from September 11, 2020 (inception) through December 31,
2020, was in preparation for an Initial Public Offering, and since our Initial
Public Offering, our activity has been limited to the search for a prospective
Partnering Transaction. We will not generate any operating revenues until the
closing and completion of our Partnering Transaction.
For the period from September 11, 2020 (inception) through December 31, 2020, we
had a net loss of approximately $76,000, which consisted of approximately
$65,000 of general and administrative expenses, including approximately $14,000
of general and administrative expenses with related party, and franchise tax
expense of approximately $12,000, offset by approximately $1,000 of interest on
the investments held in the Trust Account.
Liquidity and Capital Resources
As of December 31, 2020, we had approximately $1.3 million in cash and working
capital of approximately $1.5 million.
Our liquidity needs through the Initial Public Offering had been satisfied
through the payment of $25,000 from our Sponsor to cover for certain expenses on
behalf of us in exchange for the issuance of the Founder Shares and the
Performance Shares, a loan under the Note from our Sponsor of approximately
$148,000, and the net proceeds
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from the consummation of the Private Placement not held in the Trust Account. We
fully repaid the Note to our Sponsor on December 15, 2020. In addition, in order
to fund working capital deficiencies or finance transaction costs in connection
with a Partnering Transaction, our Sponsor may, but is not obligated to, provide
us Working Capital Loans. As of December 31, 2020, there were no amounts
outstanding under any Working Capital Loan.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet our needs through the earlier of the
consummation of a Partnering Transaction or one year from this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective Partnering Transaction candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Partnering Transaction.
Management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that the specific impact is not readily determinable as of the date of
the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Contractual Obligations
Registration and Stockholder Rights
The holders of the Founder Shares, Performance Shares, Forward Purchase Shares,
Private Placement Warrants and private placement shares underlying Private
Placement CAPS™ and private placement CAPS™ that may be issued upon conversion
of Working Capital Loans (and any shares of Class A common stock issuable upon
the exercise of the Private Placement Warrants that are part of the Private
Placement CAPS™, and CAPS™ may be issued upon conversion of Working Capital
Loans and upon conversion of the Founder Shares and the Performance Shares) are
entitled to registration rights pursuant to a registration rights agreement
signed upon the effective date of the Initial Public Offering, requiring the
Company to register such securities for resale. The holders of these securities
are entitled to make up to three demands, excluding short form demands, that we
register such securities. In addition, the holders have certain "piggy-back"
registration rights with respect to registration statements filed subsequent to
the completion of the Partnering Transaction. We will bear the expenses incurred
in connection with the filing of any such registration statements.
Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and the disclosure of contingent
assets and liabilities in our financial statements. On an ongoing basis, we
evaluate our estimates and judgments, including those related to fair value of
financial instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. We have identified the
following as our critical accounting policies:
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of
investments in money market funds that invest in U.S. government securities. The
investments held in the Trust Account are classified as trading securities.
Trading securities are presented on the balance sheet at fair value at the end
of each reporting period. The estimated fair values of investments held in the
Trust Account are determined using available market information, other than for
investments in open-ended money market funds with published daily net asset
values ("NAV"), in which case the Company uses NAV as a practical expedient to
fair value. The NAV on these investments is typically held constant at $1.00 per
unit.
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Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Shares of Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Shares
of conditionally redeemable Class A common stock (including Class A common stock
that feature redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) are classified as temporary equity. At all other times,
shares of Class A common stock are classified as stockholders' equity. Our
Class A common stock features certain redemption rights that are considered to
be outside of control and subject to the occurrence of uncertain future events.
Accordingly, at December 31, 2020, 16,419,021 shares of Class A common stock
subject to possible redemption are presented as temporary equity, outside of the
stockholders' equity section of the accompanying balance sheets.
Net Loss Per Share of Common Stock
We comply with accounting and disclosure requirements of Financial Accounting
Standard Board ("FASB") Accounting Standard Codification ("ASC") Topic 260,
"Earnings Per Share." Net loss per share is computed by dividing net loss by the
weighted average number of common stock outstanding during the period, reduced
for shares subject to forfeiture. We have not considered the effect of the
warrants sold in the Initial Public Offering and the Private Placement to
purchase an aggregate of 4,201,400 shares of our Class A common stock in the
calculation of diluted income per share, since their inclusion would be
anti-dilutive under the treasury stock method.
Our statement of operations includes a presentation of loss per share for common
stock subject to redemption in a manner similar to the two-class method of loss
per share. Net loss per share of common stock, basic and diluted for shares of
Class A common stock are calculated by dividing the income earned on investments
held in the Trust Account, net of applicable taxes, which was approximately $0
for the period from September 11, 2020 (inception) through December 31, 2020, by
the weighted average number of Class A common stock outstanding for the period.
Net loss per share of common stock, basic and diluted for shares of Class B and
Class F common stock is calculated by dividing the net loss of approximately
$76,000, less income attributable to Class A common stock of $0 by the weighted
average number of Class B common stock outstanding for the period.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material impact on
our financial statements.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments
or contractual obligations.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As such, our financial statements may not be
comparable to companies that comply with public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404,
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(ii) provide all of the compensation disclosure that may be required of
non-emerging growth public companies under the Dodd-Frank Wall Street Reform and
Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the PCAOB regarding mandatory audit firm rotation or a supplement to the
auditor's report providing additional information about the audit and the
financial statements (auditor discussion and analysis) and (iv) disclose certain
executive compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an "emerging growth company," whichever is earlier.
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